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Winning streak ends as trade war gets serious

July 12,2018

Korea’s main bourse closed lower Wednesday to end a three-day winning streak after the United States announced its plan to impose additional tariffs on Chinese products. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi sank 13.54 points, or 0.59 percent, to close at 2,280.62. Trade volume was moderate at 5.6 trillion won ($5 billion).

Following the U.S. announcement on Tuesday to impose an additional $200 billion in tariffs on Chinese imports, Beijing vowed to take retaliatory action without elaborating on details.

“The trade issue seems to have triggered investors to lock in recent gains after three consecutive sessions of gains,” said Seo Sang-young, an analyst at Kiwoom Securities.

Institutions sold a net 125 billion won worth of local stocks, while individuals bought a net 134.7 billion won and foreigners scooped up a net 201 billion won.

Most large-cap shares were bearish across the board, with top cap Samsung Electronics surrendering 0.65 percent to end at 46,000 won. SK Hynix, a major chipmaker, was down 0.57 percent to 86,800 won.

LG Display edged up 0.51 percent to 19,700 won after the flat panel maker announced Tuesday that it won approval from the Beijing government to establish a joint venture to launch an organic light-emitting diode (OLED) panel plant in China.

KB Financial Group retreated 1.28 percent to 53,800 won and Shinhan Financial Group remained unchanged at 44,550 won.

Autos were also in negative terrain with No. 1 automaker Hyundai Motor declining 1.62 percent to 121,500 won. Its smaller affiliate Kia Motors was down 0.64 percent to 30,900 won.

Ssangyong Motor, however, jumped 4.74 percent to close at 4,750 won after its parent firm Mahindra Group’s chairman Anand Mahindra unveiled a new investment plan for the carmaker during his meeting with Korean President Moon Jae-in in India. Mahindra said a total of 1.3 trillion won will be invested in SsangYong Motor.